王子ホールディングス（3861） – Summary of Consolidated Financial and Business Results for the Third Quarter of the Year Ending March 2022

Summary of Consolidated Financial and Business Resultsfor the Third Quarter of the Year Ending March 2022February 4, 2022Company Name:URL: Representative: Contact: Telephone: Oji Holdings Corporationhttps://www.ojiholdings.co.jp/Masatoshi Kaku, President & Chief Executive OfficerHiroyuki Isono, Director of the Board, Senior Executive Officer03-3563-1111+81-3-3563-1111(overseas)(Code No. 3861 Tokyo Stock Exchange)(All yen figures are rounded down to the nearest one million yen)1. Results for the Third Quarter of the Year Ending March 31, 2022 (April 1, 2021 – December 31, 2021) (1) Consolidated Business Results (Figures shown in percentage are ratios compared to the same period of the previous year)Net salesOperating profitOrdinary profitMillions of yen% Millions of yen% Millions of yen% Millions of yen%(Unaudited)Profit attributable toowners of parentFirst Nine Months of FY20211,085,6148.295,28370.6100,839111.566,645154.9First Nine Months of FY2020Note: Comprehensive income(11.5)1,003,755First Nine Months of FY2021First Nine Months of FY202055,846(34.2)93,501 million yen 18,927 million yen 47,676(39.5)26,146(44.8)First Nine Months of FY2021Profit per shareYen67.29Diluted profit pershareYen67.25First Nine Months of FY2020Note: Oji Holdings has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020),etc. effective from the beginning of the first quarter of the current consolidated fiscal year.The figures for the first nine month of the fiscal year ending March 31, 2022 are the figures after the application of the accountingstandards.26.4126.39(2) Consolidated Financial ConditionFirst Nine Months of FY2021Year ended March 2021Note: Shareholders’ equity2. Cash DividendsTotal assetsNet assetsNet assets per shareMillions of yenMillions of yen2,054,6381,981,438First Nine Months of FY2021FY2020865,674865,606816,512 million yen750,981 million yenShareholders’equity ratio%39.737.9End of 1QYenEnd of 2QYenDividend per shareEnd of 3QYenEnd of FYYenFY2020FY2021－－7.007.00FY2021 (Forecast)Note : Change in forecast of dividend … None－－7.007.00Yen824.29758.28AnnualYen14.0014.003. Consolidated Forecasts for the Year Ending March 2022 (April 1, 2021-March 31, 2022)Net salesOperating profit(Figures shown in percentage are ratios compared to the previous year)Profit attributable toowners of parentProfit per shareOrdinary profitMillions of yen% Millions of yen%Millions of yen%Millions of yen %YenFull yearNote : Change in consolidated forecasts … No1,450,0006.7120,00041.5120,00044.570,00041.070.684. Notes(1) Changes in important subsidiaries(changes regarding specified subsidiaries accompanying changes in the scope of consolidation) : None(2) Application of simple accounting methods and quarterly peculiar accounting methods : None (3) Changes in accounting methods compared with recent consolidated accounting periods (i) Changes due to accounting standard changes :(ii) Changes besides (i) :(iii) Accounting estimate change :(iv) Restatement :YesNoneNoneNone(Note)Please refer to “Consolidated Quarterly Financial Statements and Notes (Changes in accounting policies)” on page 8 ofthe attached document for more details.(4) Outstanding balance of issued shares (common stock) (i) Outstanding balance of issued shares at the end of fiscal year (Including treasury shares) First Nine Months of FY20211,014,381,817FY2020(ii) Outstanding balance of treasury shares at the end of fiscal yearFirst Nine Months of FY202123,822,397FY2020(iii) Weighted average number of shares during fiscal year1,014,381,81724,002,558First Nine Months of FY2021990,469,434First Nine Months of FY2020990,176,789NOTICE・This document is exempt from audit procedures required by Financial Instruments and Exchange Act.・The statements regarding future mentioned in this document are based on the information currently available and thepremisedeemed reasonable. The actual results may differ drastically from these forecasts due to various factors that may arise in the future.・This document is an excerpt translation of the Japanese original and is only for reference purposes. In the event of any discrepancybetween this translation and the Japanese original, the latter shall prevail.1. Qualitative Information Concerning Business Performance and Financial Situation(1) Qualitative Information Concerning Business PerformanceBusiness Performance for the First Nine Months of FY2021Net SalesOperating ProfitOrdinary ProfitProfit Attributable toOwners of ParentProfit Per ShareBillions of yenBillions of yenBillions of yenBillions of yenYenFirst Nine Months ofFY2021First Nine Months ofFY2020Increase (Decrease)Increase (Decrease)1,085.61,003.881.98.2%95.355.839.4100.847.753.266.626.140.570.6%111.5%154.9%67.2926.41The Oji Group has set “Profitability Improvement of Domestic Business”, “Expansion of Overseas Business” and “Promotion ofInnovation” as the fundamental policies of its FY2019-2021 Medium-term Management Plan. Through “Contribution to a SustainableSociety”, we aim to become a global corporate group which stably maintains consolidated operating profit of more than ¥100.0 billion.Based on the fundamental policies, in the domestic business, we have focused on restructuring our production system to respond to thestructural changes in demand, and worked to improve capital efficiency while concentrating management resources on promisingbusinesses to strengthen our ability to generate cash flow. In regard to overseas business, we have organically expanded the existingoperations by expanding the number of overseas operations as well as developing new businesses utilizing existing infrastructure. Wehave also worked to create synergies among our businesses as well as operations. In regard to promoting innovation, we have promotedthe development and the early commercialization of new businesses and new products that meet the needs of the environment andsociety, in order to actualize “Contribution to a Sustainable Society”.As the business environment has changed drastically due to the spread of COVID-19, consumption structure, lifestyles, and workingstyles have diversified, and many opportunities and risks are expected to expand. Meanwhile, we will continue to steadily implementstrategic measures to improve our corporate value in line with our fundamental policies of management strategies in Medium-termManagement Plan. We will also promptly and appropriately implement business structure reforms in light of environmental changescaused by COVID-19.Consolidated net sales for the first nine months of FY2021 increased by ¥81.9 billion to ¥1,085.6 billion (year-on-year increase of 8.2%)due to a gradual recovery in demand resulting from the resumption of economic activities that had been stagnant due to the spread ofCOVID-19 and higher pulp sales prices. Overseas sales ratio increased by 4.0 points from the previous year to 32.3%.Consolidated operating profit increased by ¥39.4 billion to ¥95.3 billion (year-on-year increase of 70.6%) due to increased salesvolume, higher pulp sales prices, and cost reduction efforts throughout the Group, although raw materials and fuel prices have sharplyincreased. Ordinary profit increased by ¥53.2 billion to ¥100.8 billion (year-on-year increase of 111.5%) due in part to foreign exchangegains from revaluation of foreign currency-denominated receivables and payables as well as an increase in operating profit. Profit beforetaxes increased by ¥55.0 billion to ¥101.6 billion (year-on-year increase of 118.2%), and profit attributable to owners of parent increasedby ¥40.5 billion to ¥66.6 billion (year-on-year increase of 154.9%).Effective from the beginning of the first quarter of FY2021, Oji Holdings has applied “Accounting Standard for Revenue Recognition(ASBJ Statement No. 29, March 31, 2020)” and has changed the accounting method for revenue recognition. Please refer to“Consolidated Quarterly Financial Statements and Notes (Changes in accounting policies)” on page 8 of the attached document for moredetails.1 / 8 Overview of Business Performance for the First Nine Months of FY2021 by Segment (I) Business Performance by Segment(Unit: Billions of yen)Net SalesFirst Nine Monthsof FY2020First Nine Monthsof FY2021Increase(Decrease)First Nine Monthsof FY2020Operating Profit（Loss）First Nine Monthsof FY2021Increase(Decrease)ReportingSegmentHousehold &Industrial MaterialsFunctional MaterialsForest Resources &Environment MarketingPrinting &Communications MediaTotalOthersTotalAdjustment (*)Consolidated total478.3134.9180.9180.0974.1199.81,173.9(170.1)1,003.8521.49.0%138.12.4%224.424.0%180.41,064.3220.31,284.6(199.0)1,085.60.2%9.3%10.3%9.4%8.2%25.98.110.95.550.44.855.20.655.823.1(10.7%)11.744.9%39.9266.6%15.2173.3%90.05.795.7(0.4)95.378.4%20.3%73.3%70.6%*Adjustment is mainly those concerning internal transactions.(II) Overview of Business Performance by SegmentThe Oji Group’s four reporting segments are: “Household and Industrial Materials”, “Functional Materials”, “Forest Resources andEnvironment Marketing”, and “Printing and Communications Media”. Each of the reporting segment consists of those that arerecognized to be similar in terms of economic characteristics, manufacturing methods or processes of products, markets in whichproducts are sold, and types of customers, among the constituent units of the Oji Group.Business segments that are not included in the reporting segments are classified as “Others”.Major business lineup for the segments are as follows. – Household and Industrial Materials: Containerboard/corrugated containers, boxboard/folding cartons, packing paper/paper bags, household paper,disposable diapers, etc. – Functional Materials:Specialty paper, thermal paper, adhesive materials, film, etc. – Forest Resources and Environment Marketing:Pulp, energy, forest plantation/lumber processing, etc. – Printing and Communications Media:Newsprint, printing/publication/communication paper, etc. – Others:Real estate, engineering, trading business, logistics, etc.As stated in “Change in accounting policies”, “Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020)” has been adopted from the beginning of the first quarter of FY2021 and the accounting method for revenue recognition and themethod used to calculate profit and loss for business segments have been changed.As a result of this change, compared to the previous method, net sales in the first nine months of FY2021 decreased by ¥1.9 billion forHousehold and Industrial Materials segment, ¥10.2 billion for Functional Materials segment, ¥0.5 billion for Forest Resources andEnvironment Marketing segment, ¥20.1 billion for Printing and Communications Media segment, and ¥4.5 billion for Others. Theeffects on each segment’s profit or loss is immaterial.2 / 8 ○Household and Industrial MaterialsIn the first nine months of FY2021, net sales amounted to ¥521.4 billion (year-on-year increase of 9.0%), and operating profit was ¥23.1 billion (year-on-year decrease of 10.7%).Regarding domestic business, sales amount increased from the previous year due to continued steady sales of containerboard andcorrugated containers for e-commerce industry as a result of a trend of staying home to prevent the spread of COVID-19, in addition tothe overall recovery in demand of containerboard, corrugated containers, boxboard and packing paper. As for disposable diapers, salesamount decreased from the previous year. As for household paper, sales amount increased from the previous year.Regarding overseas business, sales amount increased from the previous year. Although sales of disposable diapers at major retailers inMalaysia were not strong due to the spread of COVID-19, strong sales of containerboard and corrugated containers mainly inSoutheast Asia and the penetration of price increases contributed to the increase in sales amount.○Functional MaterialsIn the first nine months of FY2021, net sales amounted to ¥138.1 billion (year-on-year increase of 2.4%), and operating profit was ¥11.7 billion (year-on-year increase of 44.9%).Regarding domestic business, sales amount decreased from the previous year due to the adoption of the “Accounting Standard forRevenue Recognition“. On the other hand, demands for tickets and fancy paper (textured paper) recovered following the lifting of thestate of emergency, and demands for films for condensers used in electric vehicles, film separate for manufacturing smartphones’electronic components, and paper for manufacturing electronic components remained strong.Regarding overseas business, sales amount increased from the previous year due to increased sales amount of thermal paper in NorthAmerica, Southeast Asia and South America.○Forest Resources and Environment MarketingIn the first nine months of FY2021, net sales amounted to ¥224.4 billion (year-on-year increase of 24.0%), and operating profit was ¥39.9 billion (year-on-year increase of 266.6%).Regarding domestic business, sales amount increased from the previous year. Although sales volume of energy business decreasedfrom the previous year due to regular inspections for facilities at MPM Oji Eco-Energy Co., Ltd, exports of dissolving pulp, mainly toChina, showed a signs of recovery from the economic stagnation caused by the spread of COVID-19.Regarding overseas business, sales volume of pulp business decreased from the previous year, while sales amount increased due tohigher pulp sales prices.○Printing and Communications MediaIn the first nine months of FY2021, net sales amounted to ¥180.4 billion (year-on-year increase of 0.2%), and operating profit was ¥15.2 billion (year-on-year increase of 173.3%).Regarding domestic business, sales volume increased from the previous year due to the rebound from the economic stagnation causedby the spread of COVID-19 in the previous year in printing paper for commercial printing use, although demands for newsprint andprinting paper for publication use continued to decrease from the previous year. However, sales amount decreased from the previousyear due to the adoption of the “Accounting Standard for Revenue Recognition“.Regarding overseas business, sales amount increased from the previous year at Jiangsu Oji Paper Co., Ltd., as China is recovering fromthe economic stagnation caused by the spread of COVID-19.3 / 8 2.Consolidated Quarterly Financial Statements and NotesConsolidated quarterly balance sheetsAssetsCurrent assetsCash and depositsNotes and accounts receivable – tradeNotes and accounts receivable – trade, and contract assetsSecuritiesMerchandise and finished goodsWork in processRaw materials and suppliesOtherAllowance for doubtful accountsTotal current assetsNon-current assetsProperty, plant and equipmentBuildings and structures, netMachinery, equipment and vehicles, netLandOther, netTotal property, plant and equipmentIntangible assetsGoodwillOtherTotal intangible assetsInvestments and other assetsInvestment securitiesOtherAllowance for doubtful accountsTotal investments and other assetsTotal non-current assetsTotal assets(Unit : Millions of yen)First Nine Months /FY2021Dec 31,2021FY2020Mar 31,2021130,529297,718－5,72586,44019,27389,09041,667(1,675)668,770191,231298,937239,052312,1921,041,4133,1229,04912,171163,96196,073(952)259,0831,312,6681,981,43893,717－330,84810,86992,78520,761103,63440,678(1,647)691,648189,467326,615239,903338,9351,094,9213,5068,04611,553166,18691,303(975)256,5141,362,9902,054,6384 / 8 LiabilitiesCurrent liabilitiesNotes and accounts payable – tradeShort-term borrowingsIncome taxes payableProvisionsOtherTotal current liabilitiesNon-current liabilitiesBonds payableLong-term borrowingsProvisionsRetirement benefit liabilityOtherTotal non-current liabilitiesTotal liabilitiesNet assetsShareholders’ equityShare capitalCapital surplusRetained earningsTreasury sharesTotal shareholders’ equityAccumulated other comprehensive incomeValuation difference on available-for-sale securitiesDeferred gains or losses on hedgesRevaluation reserve for landForeign currency translation adjustmentRemeasurements of defined benefit plansTotal accumulated other comprehensive incomeShare acquisition rightsNon-controlling interestsTotal net assetsTotal liabilities and net assets(Unit : Millions of yen)First Nine Months /FY2021Dec 31,2021FY2020Mar 31,2021197,950129,96311,5264,87497,399441,713155,000362,7184,99154,01097,397674,1171,115,831103,880109,100493,224(13,400)692,80531,6542,7215,684(6,418)24,53358,176199114,426865,6061,981,438234,622135,33020,7664,33797,314492,371155,000381,2074,60354,914100,866696,5921,188,964103,880104,287546,345(13,309)741,20330,5961,0705,68115,88222,07875,30817948,982865,6742,054,6385 / 8 Consolidated quarterly statements of income(Unit : Millions of yen)First Nine Months /FY2020Apr ’20 – Dec ’20First Nine Months /FY2021Apr ’21 – Dec ’21Net salesCost of salesGross profitSelling, general and administrative expensesFreight and incidental costsEmployees’ salariesOtherTotal selling, general and administrative expensesOperating profitNon-operating incomeInterest incomeDividend incomeForeign exchange gainsShare of profit of entities accounted for using equity methodOtherTotal non-operating incomeNon-operating expensesInterest expensesForeign exchange lossesShare of loss of entities accounted for using equity methodOtherTotal non-operating expensesOrdinary profitExtraordinary incomeGain on sale of non-current assetsGain on return of assets from retirement benefits trustGain on sale of businessesOtherTotal extraordinary incomeExtraordinary lossesLoss on retirement of non-current assetsLoss on sale of investment securitiesOtherTotal extraordinary lossesProfit before income taxesIncome taxes – currentIncome taxes – deferredTotal income taxesProfitProfit attributable to non-controlling interestsProfit attributable to owners of parent1,003,755768,417235,33797,07238,60443,813179,49155,8469012,632－－3,5567,0914,7712,9461,4326,11015,26147,676134－9063,2734,3158567283,8575,44346,54717,2032,22619,43027,11797026,1461,085,614824,301261,31282,64039,41843,970166,02995,2835552,7156,8361,8124,98116,9015,048－－6,29611,345100,8392,0791,049－1,1384,2671,2559051,3813,542101,56527,4053,84731,25370,3123,66766,6456 / 8 Consolidated quarterly statements of comprehensive incomeProfitOther comprehensive incomeValuation difference on available-for-sale securitiesDeferred gains or losses on hedgesForeign currency translation adjustmentRemeasurements of defined benefit plans, net of taxShare of other comprehensive income of entities accounted forusing equity methodTotal other comprehensive incomeComprehensive incomeComprehensive income attributable toComprehensive income attributable to owners of parentComprehensive income attributable to non-controlling interests(Unit : Millions of yen)First Nine Months /FY2020Apr ’20 – Dec ’20First Nine Months /FY2021Apr ’21 – Dec ‘2127,1173,0602,041(12,805)(899)413(8,189)18,92721,896(2,969)70,312(1,667)(1,670)27,766(2,429)1,18923,18993,50183,8909,6107 / 8 (Changes in accounting policies)（Application of Accounting Standard for Revenue Recognition, etc.）“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020. Hereinafter “RevenueRecognition Standard”) and related guidelines have been adopted from the beginning of the first quarter. In line with thisadoption, revenue is recognized at the time of the transfer of controls for promised goods or services to customers in theamount that reflects the consideration to which they expect to be entitled in exchange for those goods or services.The main changes due to the adoption of the new accounting standard are in the accounting treatment of consideration paidto customers, such as sales incentives, and in the accounting treatment of transactions in which purchased goods are sold tocustomers. With respect to sales incentives and other consideration paid to customers, a portion of the expenses that werepreviously recorded in selling, general and administrative expenses are now reduced from sales. In addition, as fortransactions in which purchased goods are sold to customers, revenue was previously recognized at the total amount ofconsideration received from the customer, but has partly changed to be recognized at the net amount received from thecustomer less the amount paid to the supplier.In adopting the Revenue Recognition Standard, in accordance with the transitional treatment set forth in the proviso ofArticle 84 of the Revenue Recognition Standard, the cumulative effect of retrospective application of the standards prior tothe beginning of the first quarter was added to or subtracted from retained earnings at the beginning of the first quarter. Thenew accounting policy was applied from the beginning balance of the first quarter.However, Oji Holdings has applied the method prescribed in Article 86 of the Revenue Recognition Standard and has notretrospectively applied the new accounting policy to contracts in which almost all the revenue amounts were recognized inaccordance with the previous treatment prior to the beginning of the first quarter. In addition, Oji Holdings has applied themethod prescribed in Article 86, Paragraph (1) of the Revenue Recognition Standard, and accounted for contract changesmade prior to the beginning of the first quarter based on the contract terms after reflecting all contract changes, and addedor subtracted the cumulative effect of such changes to retained earnings at the beginning of the first quarter.As a result, for the period of first nine months, net sales decreased by ¥37,139 million, cost of sales decreased by ¥14,974million, selling, general and administrative expenses decreased by ¥22,042 million, non-operating expenses decreased by ¥91 million, operating profit decreased by ¥122 million, and ordinary profit and profit before income taxes decreased by ¥30million. In addition, the balance of retained earnings at the beginning of the current fiscal year increased by ¥110 million.The impact on information per share is immaterial.Due to the adoption of the Revenue Recognition Standard, “Trade notes and accounts receivable” which was presented in”Current assets” of the consolidated balance sheet for the previous fiscal year, is included in “Trade notes and accountsreceivable, and contract assets” from the first quarter of the current fiscal year. In accordance with the transitional treatmentset forth in Article 89-2 of the Revenue Recognition Standard, consolidated financial statements for past periods have notbeen reclassified using the new presentation method.（Application of Accounting Standard for Fair Value Measurement, etc.）“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019. Hereinafter “Fair ValueMeasurement Standard”) and other standards have been adopted from the beginning of the first quarter, and in accordancewith the transitional treatment set forth in Article 19 of Fair Value Measurement Standard and Article 44-2 of “AccountingStandard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), Oji Holdings will continue to apply newaccounting policies prescribed by Fair Value Measurement Standard and other standards into the future. The effects of thisadoption on the quarterly consolidated financial statements are immaterial.8 / 8